France’s big banks have received credit downgrades from rating agency Moody’s that noted the high probability of system support for all three banks. Is the French government about to take over these banks?
This joins the warnings that came from S&P and while European leaders are still convened in Brussels after a long night of fruitful discussion.
BNP Paribas, the largest banks, saw a two notch downgrade of the bank financial strength rating (BFSR) from B- to C. Long term debt and deposit rating was downgraded by one notch to Aa3. According to Moody’s “the probability of systemic support for BNPP remains very highâ€.
Societe Generale saw a downgrade of two notcheâ€s in the  BFSR from C+ to C-, and the long term debt and deposit ratings by one notch to A1. Also here, Moody’s said that the “probability of systemic support for SocGen remains very highâ€.
Credit Agricole received a one notch downgrade of the BFSR by one notch from C- to C and a one notch long term debt and deposit ratings to Aa3. Also here, “the probability of systemic support for CASA remains very highâ€. Creidt Agricole was rumored to be close to collapse last week, and the reason for the coordinated central bank action.
Further reading: S&P: France Could Get Get a Two-Notch Downgrade
